FedEx shares remain in a bull market supported by Q3 results

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Mar 24, 2021
  • FedEx reported better than expected Q3 earnings results
  • Barclays assigned a buy rating on FedEx this trading week
  • Argus also raised its price target to $305 on FedEx

FedEx Corporation (NYSE: FDX) shares have advanced more than 130% since March 2020, and the current share price stands around $268. FedEx shares continue to be in the buy zone, and it is important to say that Barclays assigned a buy rating on FedEx this week as the company reported better than expected Q3 earnings results.

Fundamental analysis: Barclays assigned a buy rating on FedEx this trading week

FedEx Corporation is an American multinational delivery services company that is well known for its overnight shipping service and pioneering a system that could track packages. The company’s shares have been moving in an uptrend last several months, supported by the better than expected earnings results.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

FedEx reported Q3 results this March; total revenue has increased 23% Y/Y to $21.5B while Q3 EPS was $3.47 ( above estimates by $0.23). Total revenue has increased above expectations as pandemic-driven package demand continues to rise.

Operating income improved from $483M in last year’s quarter to $1.06B, and the company’s management expects that demand for international express solutions will remain very high in the upcoming period.

According to CEO Frederick Smith, the delivery of COVID-19 vaccines is the most important task in the company’s history. Barclays assigned a buy rating on FedEx this week as the company reported better than expected Q3 earnings results and continues to move in the right direction.

“Following little to no cash generation in recent years, we see a brighter outlook for earnings quality improvement at FedEx. Ecommerce continues to support exceptional growth for the parcel carrier, and margin improvement opportunities are plentiful as network collaboration is expanded, TNT integration is completed, and weekend capacity is absorbed,” Barclays reported this trading week.

Argus has also raised its price target to $305 on FedEx after a positive earnings report as it sees FedEx well-positioned for success in 2021 and, more importantly, beyond. “We think this is a strong long-term play and that shares are a buy any time they are around the $250 level in the near-term, which means they would be trading at about 15X FWD earnings, a discount to the market, with pricing power and volumes on their side,” said an analyst from Argus.

FedEx continues to improve its position on the market, and if you are looking for a solid growing dividend income and good total return potential, shares of this company are not a bad choice. There are also some risks when it comes to buying FedEx shares this March, and if the U.S. stock market enters a bigger correction phase, the share price could be at much lower levels.

Technical analysis: Bulls remain in control of the price action

FedEx shares could advance again above the $300 resistance level, while the first sign of the trend reversal could be if the price falls below the $240 support.

Data source: tradingview.com

If the price jumps above $280, it would be a signal to buy stock, and the next target could be around $290, but if the price falls below the $240 support level, it would be a strong “sell” signal.

Summary

FedEx continues to improve its position on the market; the company reported better than expected Q3 earnings results this March, and Barclays assigned a buy rating for this stock. Argus has also raised its price target to $305 on FedEx after a positive earnings report as it sees FedEx well-positioned for success in 2021 and, more importantly, beyond.

Where to buy right now

To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:

  1. Etoro, trusted by over 13m users worldwide. Register here >
  2. Capital.com, simple, easy to use and regulated. Register here >